YouTube's Original Sin

The video site danced with the devil to get a massive traffic boost. Now it might pay the price.

Google CEO Eric Schmidt regularly uses about 30 different computers at work. Although his company has made it easy for people to organize their e-mail across different computers—not to mention to save every single e-mail they've ever received—Schmidt has a very hard time pulling up old messages. That's because he rarely saves anything; after he reads an important message, the CEO sends it straight to the trash. "It has been my practice for 30 years not to retain my e-mails unless asked specifically," he testified during a recent court proceeding. "It was my practice to delete or otherwise cause the e-mails that I had read to go away as quickly as possible."

Schmidt isn't the only one at Google who tends to forget the digital past. Chad Hurley, one of the co-founders of YouTube (which Google purchased in 2006), says he lost loads of e-mail from around the time of YouTube's 2005 launch. Meanwhile, Google co-founder Larry Page says he remembers essentially nothing from the search company's deliberations over whether to buy YouTube. The YouTube purchase cost Google $1.8 billion in stock; it remains the second largest acquisition in Google's history. Yet Page testified that he's not even sure whether he was in favor of Google buying YouTube.

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Google's executives' failures of recollection came to light thanks to a billion-dollar copyright-infringement lawsuit that Viacom filed against YouTube in 2007. Two weeks ago, the U.S. District Court for the Southern District of New York unsealed documents in the case—you can read Viacom's filings here, and Google's in this PDF. These documents are brimming with juicy nuggets like Schmidt's litigation-conscious e-mail practices and, as Viacom describes it, Larry Page's "serial amnesia." Viacom—the parent company of, among others, Paramount Pictures, MTV, Comedy Central, and Nickelodeon—argues that YouTube was founded in the image of Napster and Kazaa as a Web company bent on gaining users by stealing other people's content. Google, Viacom says, was not only aware of YouTube's bad behavior but actively encouraged it.

Google counters that YouTube's operations were legal under the Digital Millennium Copyright Act, the law that holds Web companies immune when their users upload infringing content. What's more, Google adds, Viacom itself was of two minds about YouTube. Viacom "hired no fewer than 18 different marketing agencies to upload its content to [YouTube]," Google says. "It deliberately 'roughed up' the videos to make them look stolen or leaked. It opened YouTube accounts using phony e-mail addresses. It even sent employees to Kinko's to upload clips from computers that couldn't be traced to Viacom." And here's another surprise: Viacom tried to buy YouTube several times, Google says. If Viacom wanted to own the site, could it have really considered YouTube another Napster?

While no one looks good here, YouTube's founders come off particularly poorly. Internal e-mails from the site's early days strongly suggest that Hurley and his co-founders—Steve Chen and Jawed Karim—were aware of a lot of infringing content on the site but decided to ignore much of it in order to keep YouTube growing. (Even though Hurley lost all his YouTube e-mail, Viacom was able to find many messages on a computer owned by Karim, who left YouTube shortly after its launch.)

It's true that Viacom has selectively quoted a few of these e-mails, misinterpreting jokes about copyright infringement as the founders' true intentions. In one e-mail (PDF) Chen jokes that he's going to post "20 videos of pornography and obviously copyrighted materials and then link them from the front page" in order to reach YouTube's traffic goal of 50,000 unique viewers per day. But a lot of other correspondence isn't played for laughs. YouTube has been celebrated for democratizing media; the site helped make "You" Time magazine's 2006 Person of the Year. The founders' e-mail, however, suggests that they weren't sure that most people would take to that sort of democracy. A lot of what people wanted from YouTube was what we were watching on TV: clips of Jon Stewart, music videos, and commercials. There's no evidence that YouTube's poobahs wanted to create the next Kazaa or Napster, but they did want to be very, very big—and they weren't going to let copyright law stand in the way.

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In an e-mail (PDF) sent in September 2005, for instance, Hurley complains that the site is "starting to get out of control with copyrighted material" and adds that "we may need to start enforcing restrictions soon." Chen disagreed: "I'm thinking it's still okay," he responded, explaining that taking down copyrighted videos would result in a 20 percent fall in traffic. "I'd hate to prematurely attack a problem and end up just losing growth due to it." The partners go on to discuss the various kinds of infringing material on the site and arrive at an informal, "really lax" policy for what to remove and what to keep: "Take down whole movies, take down entire TV shows, take down XXX stuff," Chen decides, but "everything else keep including sports, commercials, news, etc."

Hurley worries in another e-mail (PDF) about a CNN news clip showing the space shuttle. "If the guys from Turner would come to the site, they might be pissed. These guys are the ones that will buy us for big money, so let's make them happy." But Karim and Chen decide that the clip is fine. "Let's keep short news clips for now. We can become stricter over time, just not overnight," Karim writes.

The DMCA provides a "safe harbor" for Internet companies that take down content that they've been notified infringes on another party's copyrights. YouTube's supporters have argued that even though the site's founders might have suspected that some of the videos on the site were illegally uploaded, they couldn't really know for sure until they'd been served with an official takedown notice.

Technically, most videos—even your home videos—become copyrighted at the moment they're created. Thus it wasn't a video's copyright status that YouTube had to determine but whether it had been uploaded by someone who had been authorized to do so. Some YouTube clips of TV shows and movies had clearly been uploaded legally—Viacom itself was putting clips up on the site. Other videos, meanwhile, may have been considered legal under the fair use exception of copyright law (news videos, for instance, may have fallen under this clause). Viacom itself had trouble deciding which videos were on YouTube legally; it occasionally sent YouTube takedown notices for clips it had itself uploaded. "If Viacom itself can't get it right—when it holds the copyrights and some of the videos were uploaded by itself—how the hell is Google supposed to know which videos are legit and which are not?" TechDirt's Mike Masnick argues.

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That's a fair point. And it could have helped YouTube's case—except that the e-mail evidence makes clear that the company's founders were reluctant to take down videos even when they were positive that they were uploaded illegally. When Hurley told his partners that they needed to reject Bud Light commercials (PDF), Karim at first complied. But then Chen responded (PDF), "Can we please leave these in a bit longer? Another week or two can't hurt." So Karim put 28 Bud commercials back on the site. In another e-mail (PDF), Karim says that he decided to keep up a news clip; "let's ease up on our strict policies for now," he writes. Hurley responds, "OK man, save your meal money for some lawsuits! ;)" and then adds, "No really, I guess we'll just see what happens."

What does happen now? In 2008, Google implemented a "digital fingerprinting" system to spot and take down copyrighted material on YouTube. In its filing, Viacom says that it's satisfied with this system—in other words, its only remaining quarrel is with the YouTube of yesteryear. It sure seems hypocritical of Viacom to go after a system that it also saw as a key promotional tool for its videos. But Viacom's hypocrisy is not on trial here; YouTube's actions are, and it's difficult to read through the record without concluding that YouTube was playing very fast and loose with the rules.

As Fred von Lohmann of the Electronic Frontier Foundation points out, a Viacom victory in this case could substantially weaken protections for a range of Internet companies. If a court rules that Web firms are only safe from liability if they implement rigorous copyright filtering systems—and not if they merely take down material they've been told is unauthorized—then search engines, auction sites, "cloud" apps like Google Docs, and all kinds of other services could be rendered illegal in their current forms.

In other words, the stakes are bigger here for Google than for Viacom. In the end, the search company might decide it's best to settle the lawsuit out of court and forever forget about YouTube's original sin.